1.31.2008

Net free or borrowed reserves of U.S. depository institutions. Last updated 1/25/08.

Or as Mike Shedlock put it: "Banks in aggregate have now burned through all of their capital and are forced to borrow reserves from the Fed in order to keep lending." Also: "Imagine a major bank telling customers: "We have no cash reserves so we can't give you a loan." With that in mind, banks are scrambling to raise cash.